Limit Professionals Compensation

[Alex]

not only "no", but HELL TO THE NO.

[RetireeRobert]

Quote:

Originally Posted by ERD50 Maybe. But only if you think the govt can invest that money better than the individuals who earned it. What do you think rich people do with their money - light cigars with it? It gets invested, often in growth companies that provide jobs. It gets spent. When it gets spent, it buys things that other people made, also providing jobs. And why set an amount that we should 'take' from people upfront, just because it will still leave them with something? Seems backwards to me. Figure what the govt really needs to spend, then do the math to fund it. Repeat as needed. -ERD50

Dang, if you don't just get right to the heart of things. The clarity of your logic and force of your argument are startlingly refreshing.

[ERD50]

Quote:

Originally Posted by bright eyed i think part of the problem is how much the system is reliant on egocentric electeds to make the right decision?!

Well, we certainly agree there!

And, as I said before, I'm not necessarily against raising min wage. But I would like to see some info that might indicate what would be accomplished, and what would be the negatives. Business do try to cut hours and cut jobs when wages go up. There are alternatives to cheap labor in some industries. Don't know if that outweighs any benefits from the higher wages, but it is a consideration, among others (raising the price of goods). It might be the right thing to do, but I am a bit skeptical.

It reminds me a bit of a chapter in the book 'Freakonomics'. A study was done, and it showed a strong correlation between the number of books on bookshelves in homes, and test scores of the kids in those homes. So, a program was created to distribute books to people in areas of poor test scores. It had no effect on test scores. Books on the shelf were the result of a family that valued education and instilled that in their kids, not the other way around. One could argue that the book program hurt them (in an opportunity cost kind of way), that book money could/should have gone to programs that would have an effect.

OK, sure, 'money' is more correlated to 'wealth' than 'books' are to test scores' . But I still think there is something to it. Does raising the min wage help people, overall? Data please, if available.

Quote:

Originally Posted by RetireeRobert The clarity of your logic and force of your argument are startlingly refreshing.

Awww shucks, thanks RR. Somehow, I doubt that anyone in favor of capping wages at $50 would agree with you on that.


-ERD50

[ERD50]

Related to this topic - I have heard this since I was a kid in school, but it never quite made sense to me. But I never asked before. Can anyone validate it, or de-bunk it:

I was told that Henry Ford paid his line workers a higher than normal wage, so they could afford to buy his cars.

Does that work?

Hmmmm, maybe it works if you have the top selling product and can demand a higher price to pay those wages. But if you are in a competitive market, wouldn't it drive up your costs, resulting in fewer sales and fewer jobs? All else being equal?

Seems like every penny of that increased wage would need to go back to buying a Ford car, not to anything else, or Henry would not get a very good 'return' (literally) on his money. It seems a stretch to say that the workers would spend that increased wage just on the car, not across a spectrum of goods.

Just always wondered about that.

-ERD50

[Danny]

Hi ERD, my former employer (retail) for competitive reasons sought to be the employer of choice in their field - so they paid better wages and benefits than the competition, there by able to pick a relatively higher level of motivated competent employee to deal with the guests. Guests were relatively happier with their experience and continued to bring their trade to our stores. Resulted in higher sales and because of meeting success with this formula resulted in expansion and more jobs. Employees were given ongoing store discount so some of the wages ended back with the company - a mutually beneficial relationship was established with higher wage and benefits and cheaper goods for the employee and better and more loyal employee and thus better experience for the guests and thus more sales for the ever growing company. This is a real world example of how raising the wage bar can work.

[travelover]

Quote:

Originally Posted by ERD50 ..............I was told that Henry Ford paid his line workers a higher than normal wage, so they could afford to buy his cars..............

IIRC, in the book Ford: The Men and the Machine it was stated that Ford only paid those wages because the farm boys he hired couldn't take the monotony of the line and quit soon after hiring in. The $5 wage was to limit turnover.

[ERD50]

Quote:

Originally Posted by DanTien Hi ERD, my former employer (retail) for competitive reasons sought to be the employer of choice in their field - so they paid better wages and benefits than the competition, there by able to pick a relatively higher level of motivated competent employee to deal with the guests. Guests were relatively happier with their experience and continued to bring their trade to our stores. Resulted in higher sales and because of meeting success with this formula resulted in expansion and more jobs. Employees were given ongoing store discount so some of the wages ended back with the company - a mutually beneficial relationship was established with higher wage and benefits and cheaper goods for the employee and better and more loyal employee and thus better experience for the guests and thus more sales for the ever growing company. This is a real world example of how raising the wage bar can work.

Excellent example, thanks DanTien.

But (I think) there is a difference between an across the board wage increase, and your story.

RE: 'there by able to pick a relatively higher level of motivated competent employee'.

So this was not an arbitrary 'raise everyone's salary', it was a free market 'offer more money to get better people', approach. Makes perfect sense to me, and one reason I'm inclined against raising the min wage.

So I ask, while business owners are free to make this decision for themselves, why would we want the govt mandating it?

-ERD50

[ERD50]

Quote:

Originally Posted by travelover IIRC, in the book Ford: The Men and the Machine it was stated that Ford only paid those wages because the farm boys he hired couldn't take the monotony of the line and quit soon after hiring in. The $5 wage was to limit turnover.

Thanks, that makes much more sense to me. I wonder if all my teachers believed the old story?

-ERD50

[Danny]

Quote:

Originally Posted by ERD50 Excellent example, thanks DanTien. But (I think) there is a difference between an across the board wage increase, and your story. RE: 'there by able to pick a relatively higher level of motivated competent employee'. So this was not an arbitrary 'raise everyone's salary', it was a free market 'offer more money to get better people', approach. Makes perfect sense to me, and one reason I'm inclined against raising the min wage. So I ask, while business owners are free to make this decision for themselves, why would we want the govt mandating it? -ERD50

everyone got the same higher wage so in effect across the board...unfortunately not everyone is so enlightened and needs encouragement to do the right thing.....exploitation of illegals comes to mind...defacto importation of illegals to artificially keep wages low in an area also...

[ERD50]

Quote:

Originally Posted by DanTien everyone got the same higher wage so in effect across the board...unfortunately not everyone is so enlightened and needs encouragement to do the right thing.....exploitation of illegals comes to mind...defacto importation of illegals to artificially keep wages low in an area also...

No, 'everyone' in that company, not 'everyone'.

You did say 'pick' didn't you, as in 'hire'? That is my point.

Quote:

there by able to pick a relatively higher level of motivated competent employee

I see the word 'ILLEGAL' in your other statements. That's different.

If a company is not 'enlightened' enough to pay the wages that are required to hire/retain the quality of people that they need, I say let them go out of business. They will be replaced by a better run company. In the long run, everyone wins.

You are arguing that the govt knows better than the business owner just what wages that business owner should offer. Hmmm, should we have the govt decide how much inventory he/she should carry, how to price their goods, what goods to offer, what hours they should stay open, how big a sign they should put out front....? Why is the business owner capable of deciding these things for themselves, but not the wages to offer? Seems like pretty selective logic.

Let the business decide all of that, and let the free market work it out.

That is not to say that regulation is not required in some areas (I'm not an all-or-nothing guy). But I do think we should have some proof that the regulation is better than the free market 'self regulation', before we get our legislators involved.

-ERD50

[Zathras]

Quote:

everyone got the same higher wage so in effect across the board

Everyone in that one company. Not everyone in the world.
If you raise the minimum, everyone is making that amount. This then eliminates the reward of 'getting better people by offering more money'.
I do agree that minimum pay for full time work should allow people to have the basic needs.
However, I don't believe that your example of an enlightened wage offering has any parrellels to the minimum wage.


DOH, Erd beat me to it and said it better too!

[TickTock]

DanTien,

You posted:

"my former employer (retail) for competitive reasons sought to be the employer of choice in their field - so they paid better wages and benefits than the competition, there by able to pick a relatively higher level of motivated competent employee to deal with the guests. Guests were relatively happier with their experience and continued to bring their trade to our stores. Resulted in higher sales and because of meeting success with this formula resulted in expansion and more jobs. Employees were given ongoing store discount so some of the wages ended back with the company - a mutually beneficial relationship was established with higher wage and benefits and cheaper goods for the employee and better and more loyal employee and thus better experience for the guests and thus more sales for the ever growing company. This is a real world example of how raising the wage bar can work."

Then:

"everyone got the same higher wage so in effect across the board...unfortunately not everyone is so enlightened and needs encouragement to do the right thing"

These are not the same thing as a minimum wage increase. If all companies across the board raised wages, there is no relative motivation that any single company has to attract the better employees.

I like the first example, but to me it is not support for a minimum wage increase.

[TickTock]

Scooped by ERD50 and Zathras!

[Zathras]

Here Dan, how about this scenario.
A business owner turns the corner and his new small business becomes very profitable.
He pulls in 4 Million dollars this year after paying all business expenses. He then goes to reinvest in his company. He can hire 25 new employees and open up a new shop with a bank loan using his money as collateral.
Ooops, forgot about the 'soak the rich' taxes added on top of the other taxes already paid.
Perhaps he can hire an extra couple of employees and dream about expanding his business if he saves up the money for 20 years??

[Danny]

Quote:

Originally Posted by ERD50 No, 'everyone' in that company, not 'everyone'. You did say 'pick' didn't you, as in 'hire'? That is my point. I see the word 'ILLEGAL' in your other statements. That's different. If a company is not 'enlightened' enough to pay the wages that are required to hire/retain the quality of people that they need, I say let them go out of business. They will be replaced by a better run company. In the long run, everyone wins. You are arguing that the govt knows better than the business owner just what wages that business owner should offer. Hmmm, should we have the govt decide how much inventory he/she should carry, how to price their goods, what goods to offer, what hours they should stay open, how big a sign they should put out front....? Why is the business owner capable of deciding these things for themselves, but not the wages to offer? Seems like pretty selective logic. Let the business decide all of that, and let the free market work it out. That is not to say that regulation is not required in some areas (I'm not an all-or-nothing guy). But I do think we should have some proof that the regulation is better than the free market 'self regulation', before we get our legislators involved. -ERD50

initially picked but then everyone had a higher level of base pay going forward based on ratings and length of service...there is a very important role for government to play in protecting the people from the powerful corporations that that are ultimately governed by delivering profits to their shareholders....believe it or not there are companies that don't care about your health and welfare if they can get away with it...not uncommon for government to regulate how a business is run - surely you can think of some examples around were you live...I think we have a better quality of life because we have a powerful force(ultimately We The People and our reps) protecting our interests

[Danny]

Quote:

Originally Posted by TickTock DanTien, You posted: "my former employer (retail) for competitive reasons sought to be the employer of choice in their field - so they paid better wages and benefits than the competition, there by able to pick a relatively higher level of motivated competent employee to deal with the guests. Guests were relatively happier with their experience and continued to bring their trade to our stores. Resulted in higher sales and because of meeting success with this formula resulted in expansion and more jobs. Employees were given ongoing store discount so some of the wages ended back with the company - a mutually beneficial relationship was established with higher wage and benefits and cheaper goods for the employee and better and more loyal employee and thus better experience for the guests and thus more sales for the ever growing company. This is a real world example of how raising the wage bar can work." Then: "everyone got the same higher wage so in effect across the board...unfortunately not everyone is so enlightened and needs encouragement to do the right thing" These are not the same thing as a minimum wage increase. If all companies across the board raised wages, there is no relative motivation that any single company has to attract the better employees. I like the first example, but to me it is not support for a minimum wage increase.

this was in response to ERD wondering about Ford offering higher wages in earlier post...thanks

[ERD50]

Quote:

Originally Posted by DanTien there is a very important role for government to play in protecting the people from the powerful corporations that that are ultimately governed by delivering profits to their shareholders....

Motivation to deliver profits is probably the best system we have for getting the most good to the most people. It isn't perfect.

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believe it or not there are companies that don't care about your health and welfare if they can get away with it...

Oh, I believe it - absolutely. See Adam Smith's famous quote on the butcher, baker, brewer.... But, in a free market, you can't really 'get away with it'. Your best workers will go to the competition.

Quote:

not uncommon for government to regulate how a business is run - surely you can think of some examples around were you live...I think we have a better quality of life because we have a powerful force(ultimately We The People and our reps) protecting our interests

Again, I agree (getting scary isn't it?). The diff is, I say apply this regulation only when the free market isn't going to do it. Pollution controls are the best example. Tough for one company (or individual) to do the 'right thing' and need to charge a higher price and maybe provide an inferior performing product, if your competition can spew out pollution with no impact. So, regulation is beneficial in some cases. I'm just not convinced that min wage is one of them.

Actually, I peeked at wiki, and they have a very good entry on the pros/cons of min wage controls. I have some thin-set slaking at the moment, so maybe I'll condense that entry down later.

-ERD50

PS - no one has been accused of wanting to see people starving in the streets (yet)! Progress?

[Danny]

Quote:

Originally Posted by Zathras Here Dan, how about this scenario. A business owner turns the corner and his new small business becomes very profitable. He pulls in 4 Million dollars this year after paying all business expenses. He then goes to reinvest in his company. He can hire 25 new employees and open up a new shop with a bank loan using his money as collateral. Ooops, forgot about the 'soak the rich' taxes added on top of the other taxes already paid. Perhaps he can hire an extra couple of employees and dream about expanding his business if he saves up the money for 20 years??

I understand your point Zathras, but business has managed to survive and proper when taxes were much higher in days gone by.....some years corps paid over 50% in the 50's, etc.

[bright eyed]

well, perhaps the answer is a more involved citizenry - the electeds have run the business of gubmt amuck and we're all paying for it (literally)...

new thread, campaign finance reform!

[eridanus]

Quote:

Originally Posted by DanTien I understand your point Zathras, but business has managed to survive and proper when taxes were much higher in days gone by.....some years corps paid over 50% in the 50's, etc.

Right. Taxes do in fact create more jobs, revenue, and prosperity...up to a point. If I cared enough, I'd find the study that suggested various tax rates.

As to the little restaurant story, it begs the question: How does the restaurant owner get paid if the bill is reduced? Cut taxes? I agree, but where? You won't like my tax cuts and I won't like yours.